If You Had Bought Four Seasons Education (Cayman)'s (NYSE:FEDU) Shares A Year Ago You Would Be Down 30%

This week we saw the Four Seasons Education (Cayman) Inc. (NYSE:FEDU) share price climb by 15%. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 30% in one year, under-performing the market.

See our latest analysis for Four Seasons Education (Cayman)

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Four Seasons Education (Cayman) saw its earnings per share drop below zero. While this may prove temporary, we'd consider it a negative, so it doesn't surprise us that the stock price is down. However, there may be an opportunity for investors if the company can recover.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Four Seasons Education (Cayman)'s key metrics by checking this interactive graph of Four Seasons Education (Cayman)'s earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Four Seasons Education (Cayman)'s share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Four Seasons Education (Cayman) shareholders, and that cash payout explains why its total shareholder loss of 27%, over the last year, isn't as bad as the share price return.

A Different Perspective

Given that the market gained 18% in the last year, Four Seasons Education (Cayman) shareholders might be miffed that they lost 27%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 0.7% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Four Seasons Education (Cayman) you should be aware of, and 1 of them makes us a bit uncomfortable.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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